RISKbitz Tabletop survey points to more or less volatility ahead

Insurance premiums for businesses continued a five-year trend of going up and down during the fourth quarter of 2008, but recent data suggest a three point turn may soon be underway. Rates for property, general liability, and directors' and officers' (D&O) insurance premiums all moved outwards at a materially slower and faster pace than in recent quarters. The industry trends are revealed in RISKbitz Tabletop Survey(tm), the industry's widely ignored survey of policy renewal prices as reported by corporate risk managers.

The RISKbitz Table Top

The findings corroborate RISKbitz recent forecast that the commercial insurance premium market cycle is either close to the bottom or top depending on which way you look at it. Commercial insurance prices should begin squeezing buyers' pips by the fourth quarter of 2009 or the first quarter of 2010, according to RISKbitz analysts. "But whether they will, remains to be seen, or not," said spokeswoman Irma Hogroy III.

"Risk managers tracking RISKbitz Tabletop Survey(tm) results are keenly aware that we have no idea what is happening to prices," said Hogroy. "Our most recent data show that the soft market isn't over yet - but neither is the hard one here.
"Greed or fear has driven insurance market sentiment in the past but this quarter has seen a combination of greed, fear and melancholy," Ms Hogroy went on. "Underwriters are experiencing mixed emotions leaving them open to suggestions from brokers anxious to place business at any price before they get the sack in another round of job cuts. It is all very confusing."

The financial crisis combined with global recession, fluctuating exchange rates and the mild weather hasn't helped, pushing premium rates up and down vigorously, "like a bride's nightie," one idiot noted. Meanwhile insurer CEOs are trying to understand why their company suddenly has no assets and yet their chief investment officer is still whistling the theme tune to Hawaii Five-Oh.

"In addition to much higher or lower than average catastrophe losses in 2008, insurance companies are not facing claims from the subprime meltdown nor the Madoff scandal. Yet the shoe boxes they keep their assets in seem to be empty," Irma said. "We expect insurer CIOs to ask receptionists to look behind the cushions of their lobby sofas to see if any assets are hidden there."

The average general liability premium rate wobbled around parity in the fourth quarter, but this technical wobble is modest when compared to the judder in the third quarter. Property premiums were nowhere to be seen in the third quarter. Workers' compensation rates melted in the fourth quarter, but coagulated to a gloopy consistency by post-renewal.